Multicultural Organization: Definition and How It Works

What Is a Multicultural Organization?

A multicultural organization is one that has a workforce that includes people from diverse backgrounds across all departments, and which offers them equal opportunity for input and advancement within the company.

A multicultural organization also possesses an absence of discrimination or prejudice toward people based on their race, religion, ethnicity, gender, age, sexual orientation, or physical limitation. In a multicultural organization, skill, talent, and performance are the criteria for meritocratic advancement.

Understanding Multicultural Organizations

A multicultural organization recognizes that the contributions of its employees include perspectives based on culture, gender, and other unique characteristics.

Few companies in our times want to make their products or services available only to one narrow slice of the population. A multicultural workforce helps them create products that meet the needs and expectations of a broader population.

An emphasis on diversity also may attract a better talent pool. In a survey by Glassdoor.com, fully 67% of job-seekers said that a diverse workforce was an important factor in their decision to accept or reject a job offer.

Moreover, a multicultural workforce is seen as essential for any business considering going global. "As national politics and discourse seem to grow more inward-looking and divisive across America and Europe, successful businesses must continue to think inclusively and globally," notes a blog for Hult International Business School. "Embracing cultural diversity in the workplace is an important first step for businesses that want to be competitive on an international scale."

World's Most Multicultural Companies

In fact, some of the biggest companies in the world are now at the top of the multicultural movement.

The Refinitiv D&I index, an annual ranking of the world's most diverse and inclusive companies, lists BlackRock Inc., Natura & Co Holding SA, and Accenture Plc as its top three for 2020. Others at the top of the list include Royal Bank of Canada, Industria de Diseno Textil SA, L'Oreal SA, Allianz SE, Telecom Italia SpA, Novartis AG, and Bank of Nova Scotia.

Notably, Refinitiv produces the index for use by professional investors. "The industry is beginning to recognize the societal and business benefits of investing in diverse and inclusive companies, and we are working closely with various investment firms who are looking to develop investable products based on our D&I Index," said Elena Philipova, a Refinitiv executive.

Special Considerations

The trend toward creating more diverse workplaces is consistent with demographic changes in economically developed western countries.

In the United States, the population has become far more racially and ethnically diverse over the past two decades. According to the latest U.S. Census data, only 60.1% of the population identifies as both white and non-Hispanic. More than 20% speak a language other than English at home.